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Prepress Content: The following article is a preprint of a scientific paper that has completed the peer-review process and been accepted for publication within Economics of Energy & Environmental Policy.
While the International Association for Energy Economics (IAEE) makes every effort to ensure the veracity of the material and the accuracy of the data therein, IAEE is not responsible for the citing of this content until the article is actually printed in a final version of Economics of Energy & Environmental Policy. For example, preprinted articles are often moved from issue to issue affecting page numbers, and actual volume and issue numbers. Care should be given when citing Economics of Energy & Environmental Policy preprint articles.

Economics of Energy & Environmental Policy
Volume 7, Number 2

How Renewable Energy is Reshaping Europe’s Electricity Market Design

L.J. De Vries and R.A. Verzijlbergh

DOI: 10.5547/2160–5890.7.2.ldev
View Abstract

We present a systematic review of the challenges to the regulation of electricity markets that are posed by the integration of variable renewable energy sources. System integration is the key to developing the required flexibility, because flexibility options exist at all system levels and within the competitive as well as in the regulated (network) domains. The fluctuating nature of variable renewable energy changes the dynamics of investment decisions. We develop a framework for analysing relations between aspects of the regulation of the power sector that need to be coordinated in order to achieve (or at least improve) economic efficiency. We base the framework on the technical functionalities of the electricity infrastructure, which we group along three dimensions: system level (from retail/distribution to transmission/wholesale), geographic scope (the connection between electricity systems) and time scales (from real-time operations and balancing markets to the investment time scale). The framework helps identify regulatory challenges - potential inefficiencies due to a lack of coordination - and to place them into context. The picture that emerges from this approach is that the institutional fragmentation of the European electricity sector will become increasingly burdensome as the development variable renewable energy requires ever closer coordination between countries, between the different levels of the electricity system and between markets that serve different time scales. Interactions between elements of market design and regulation such as congestion management, renewable energy policy and system adequacy policy affect each other and are an additional reason for a system integration approach to regulation.

How Do Low Gas Prices Affect Costs and Benefits of US New Vehicle Fuel Economy Standards?

Joshua Linn, Virginia McConnell, and Benjamin Leard

DOI: *none*
No Abstract

From COP21 pledges to a fair 2°C pathway

F. Babonneau, A. Haurie, and M. Vielle

DOI: *none*
No Abstract